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Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Sales Average operating assets Net operating income Minimum

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Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Sales Average operating assets Net operating income Minimum required rate of return Division A $6,400,000 $1,600,000 $ 352,000 18.00% Division B $10,400,000 $ 5,200,000 $ 988,000 19.00% Division C $9,500,000 $2,375,000 $ 261,250 15.00% 3. Assume that each division is presented with an investment opportunity that would yield a 20% rate of return. a. If performance is being measured by ROI, which division or divisions will probably accept or reject the opportunity? Division A Division B Division C b. If performance is being measured by residual income, which division or divisions will probably accept or reject the opportunity? Division A Division B Division C

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